Is Chicago really the city that works?

July 17, 2009|By Elizabeth Milnikel

If you thought the city's handling of parking was abominable, wait until you hear how it regulates small businesses.

We all know by now that the city sold off the parking meters rather haplessly. There wasn't enough effort to ensure that the citizens got the greatest possible benefit from privatization. The mayor's plan went through without push back -- or comprehension -- from the City Council. Meters multiplied, restricted hours lengthened, rates skyrocketed and Sunday is no longer a day of rest. Coupled with the city's ravenous appetite for the revenue from parking tickets, the situation is at least irritating, if not entirely infuriating.

The privatization of parking meters is costing us all a lot of quarters and some freedom of mobility. But when incompetence, favoritism and negligence in city government determines who can start a business, entrepreneurs lose their very livelihoods and their freedom to choose an occupation. Neighborhoods lose the mom-and-pop shops that give them character and variety and low prices. And Chicago loses its ability to foster new jobs and economic growth.

Small business owners all across the city are being ticketed for having signs without permits, even though some of them hung the signs when it was perfectly legal to do so. Nowadays, a business isn't supposed to hang any sign without hiring a bonded sign erector, paying fees and getting permission from several unconnected city departments as well as the local alderman. As difficult as it is to interpret tow-zone signs pointing every which direction, the permit process to put a sign above your storefront is even more baffling. Your heart sinks when you see that orange envelope under your wiper and know you must pay $50, but imagine getting a signage ticket for $3,000 in a year when your business is just barely hanging on.

Chicago will not allow someone to open a children's play center -- a business with toys and games and activities where parents or nannies can bring toddlers for a little neighborhood play group -- without paying a $770 application fee, getting fingerprinted, paying an architect for drawings, sorting out the Zoning Department's byzantine rules for off-street parking spaces and giving the neighbors a few weeks to object to the new business. A playroom must meet all the same requirements as a strip club or sports stadium. And while it waits for the government's blessing, the small business must stay closed but continue paying rent on empty space. The penalty for operating a playroom without the license? Up to $10,000 a day.

A street vendor selling bottles of water on a hot day will be harassed by police if he does not have a special license or if he crossed an invisible line into a no-peddling zone. (Aldermen can arbitrarily draw lines around neighborhoods to prohibit selling on the street.) If his citations have piled up and he cannot afford to pay them off, he will not even be allowed to make things right and get a license. Meanwhile, all too often, he knows that the drug dealers across the street ply their trade undisturbed.

When business owners run afoul of these convoluted, counterintuitive rules, they are called in to the Department of Administrative Hearings. The department's Web site smugly states that it is "Chicago's quality-of-life court." That is, unfortunately, too true: It really downgrades the quality of life for Chicago entrepreneurs and their customers.

If Chicago remains so hostile to start-up businesses and self-employed people when the region has now lost nearly 170,000 jobs in the last year alone, we have no hope of recovering. Instead of fining small businesses at every turn and enforcing confusing regulations that have nothing to do with protecting the public's health and safety, the government should get out of the way of industrious people who want nothing more than to pursue their American dream. It is time that Mayor Richard Daley and the City Council support entrepreneurs so we can truly become "the city that works."

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Elizabeth Milnikel directs the Institute for Justice Clinic on Entrepreneurship at the University of Chicago Law School. She is the co-author of the new report "Regulatory Field: Home of Chicago Laws," which is available at www.ij.org.